Net Element (NETE) Weak On High Volume Today

Trade-Ideas LLC identified Net Element ( NETE) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Net Element as such a stock due to the following factors:

NETE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.2 million.

NETE has traded 1.9 million shares today.

NETE is trading at 5.71 times the normal volume for the stock at this time of day.

NETE is trading at a new low 13.02% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

Net Element, Inc., a global payments-as-a-service, operates as a technology provider with an integrated mobile and transactional services platform serving emerging market clients. Currently there is 1 analyst that rates Net Element a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Net Element has been 2.7 million shares per day over the past 30 days. Net Element has a market cap of $33.4 million and is part of the technology sector and internet industry. The stock has a beta of 0.34 and a short float of 0.7% with 0.03 days to cover. Shares are down 78.6% year-to-date as of the close of trading on Wednesday.

TheStreet Quant Ratings rates Net Element as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 230.9% when compared to the same quarter one year ago, falling from $1.35 million to -$1.76 million.

Net operating cash flow has significantly decreased to -$2.31 million or 187.18% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

The gross profit margin for NET ELEMENT INC is rather low; currently it is at 20.82%. Regardless of NETE's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, NETE's net profit margin of -25.53% significantly underperformed when compared to the industry average.

Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 91.72%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 200.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

Despite currently having a low debt-to-equity ratio of 0.39, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.85 is weak.